Bank Clothiers to expand Earnings rebound prompts plans to open 25 more stores

Retail

September 04, 1997|By Liz Bowie | Liz Bowie,SUN STAFF

After rebounding from the financial problems of last year, Jos. A. Bank Clothiers Inc. said yesterday that it will capitalize on six months of positive earnings and open 25 new stores in the next 2 1/2 years.

The Hampstead-based men's apparel company said earnings grew to $200,000, or 3 cents a share, for the quarter ended Aug. 2, compared with a loss of $600,000, or 8 cents, for the same period in 1996.

"I think the apparel market rebounded somewhat and we rode it," said Timothy F. Finley, chairman and chief executive officer of the company. But Finley also said that a variety of factors helped the comeback.

For the first time since going public, he said, the company posted a profit in the usually stagnant second quarter. Ties and sports coats sold especially well, the company made improvements in merchandise and got increased exposure through more advertising.

But the company also benefited from surviving an industrywide downturn, and then being solid financially when men looked into their closets and decided to buy expensive suits and sports coats again.

But perhaps the biggest factor in the company's recovery, according to Finley, is that it shed its women's department, its weaker side, and concentrated on its core men's business.

"The bottom line is that they have made tremendous progress over the last year," said Kenneth Gassman, an analyst with Richmond, Va.-based Davenport & Co. "This is the first time that that they have been profitable since they have been a public company. It is an important event."

Sales for the second quarter increased 17.1 percent to $39.5 million, compared to $33.8 million for the same period in 1996. Sales for the six months increased to $78.2 million, compared to $71.1 million.

Same-store sales, an important barometer of a retailer's financial health, increased 10.8 percent for the quarter and 4.3 percent for the first six months of the year.

Bank's most significant growth came in its catalog sales, which grew 40 percent in the first six months. The company said it will increase its catalog distribution.

While the company is set to grow -- five more stores by the end of this year and another 12 next year -- it will not enter new markets.

The store openings will be financed through a bank line of credit that is expected to be sealed in the next week.

By the end of the year, Bank will open five stores in Columbia, New York, Houston, Denver and Baton Rouge, La., Finley said. Banks also has signed nine more letters of intent on sites east of Denver, he said.

Bank's manufacturing for the new stores will be out-sourced because the Baltimore operation is at capacity, Finley said.

Pub Date: 9/04/97

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